SB 81 — Revises various provisions relating to tobacco products. (BDR 32-190)

Section 76 also removes the authority of the Department to notify wholesale dealers and retail dealers by mailing notice to a physical address and, instead, requires the Department to notify wholesale dealers of cigarettes to identify and setretail asidedealers forby saleelectronic outsidemail. of this State any products from a manufacturer, style or brand family that has been removed from the directory within 20 days after receiving the notice of the removal of the manufacturer or brand family.

ExistingFinally, lawsection 76 requires eacha distributorwholesale dealer of cigarettes to submitidentify certainand quarter.set aside for sale outside of this State any products from a manufacturer, style or brand family that has been removed from the directory within 20 days after receiving the notice of the removal of the manufacturer or brand family.

Existing law requires each distributor of cigarettes to submit certain information to the Department 20 calendar days after the end of each calendar quarter.

- 80th Session (2019) – 4 – Section 80 of this bill provides that the Department will not accept bonds, suretysavings bondcertificates, requiredcertificates toof bedeposit filedor byinvestment certificates in lieu of the dealers of other tobacco products.y wholesale dealers of cigarettes and wholesaleofwholesale theEXPLANATION dealers– ofMatter otherin tobaccobolded products.italics is new;

matter between brackets [omitted material] is material to be omitted.

As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 1.5 and 1.7 of thisthiSec. act have the meanings ascribed to them in those sections.

Sec.

- *SB81_R1* – 5 – Sec.

“License” means a license issued pursuant to sections 2 to 34, inclusive, of this act that authorizes the holder of the license to operate a warehouse or distribution center or to conduct business as a manufacturer, a wholesale dealer of cigarettes, a - 80th Session (2019) – 5 – wholesale dealer of other tobacco products, a tobacco retail dealer or a logistics company.

and (b) Authorized by a manufacturer, a wholesale dealer of cigarettes or a wholesale dealer of other tobacco products to temporarily store, fulfill orders for and coordinate the transport or delivery of cigarettes or other tobacco products from a facility ininor this State on behalf of and at the direction of the manufacturer, wholesale dealer of cigarettes or wholesale dealer of other tobacco products.

Sec.to:Sec.

“Tobacco retail dealer” has the meaning ascribed to:1.

1.

“Warehouse or distribution center” means a building in this State which is owned, leased or rented and operated by a manufacturer, wholesale dealer of cigarettes, - *SB81_R1* – 6 – wholesale dealer of other tobacco products or tobacco retail dealer for the temporary storage of cigarettes or other tobacco products.

- 80th Session (2019) – 6 – Sec.

A person shall not engage in business as a logistics company unless that personactivity firstfrom securesthe Department.ecures a license to engage in that4. activity from the Department.

4.

A person may be licensed as a wholesale dealer of cigarettes, a wholesale dealer of other tobacco products, a tobacco retailcenter.dealer dealer and as an operator of a warehouse or distribution center.Sec.

Sec.

Indian tribes on whose reservations or colonies cigarettes or other tobacco products are sold and, pursuant to NRS 370.515, from which the Department does not collect the tax imposed by - *SB81_R1* – 7 – this chapter on such cigarettes or other tobacco products sold on the reservations or colonies.

- 80th Session (2019) – 7 – Sec.

(a) The applicant for the license or any combination of persons directly or indirectly owning, in the aggregate, more than 10 percent of the ownership interests in the applicant:

(3)revoked Hadin another jurisdiction within the past 2 years;ense (4) Has been convicted of a licensecrime revokedrelating to the manufacture, distribution or hadsale anof equivalentcigarettes licenseor revokedother intobacco anotherproducts jurisdictionor withina crime relating to the pastavoidance 2or years;evasion of taxes;

(4) Has been convicted of a crime relating to the manufacture, distribution or sale of cigarettes or other tobacco products or a crime relating to the avoidance or evasion of taxes;

and (II)(2) AThe tobaccolicensee retailwould dealer;conduct operations under both licenses at the same location;

(2) The licensee would conduct operations under both licenses at the same location;

- *SB81_R1* – 8 – Sec.

- 80th Session (2019) – 8 – 1.

Specify the location, by street and number, of the principal principal place of business of the applicant.applicant pursuant to this the subsection, an application for a license as a cigarette vending machine operator must list all cigarette vending machine locations for which the license is sought.

In addition to specifying the principal place of business of the applicant pursuant to this subsection, an application for a license as a cigarette vending machine operator must list all cigarette vending machine locations for which the license is sought.

Except as otherwise provided in subsection 2, a licensee shall not operate from any location other than the locationwho listedis onlicensed theas facea ofcigarette vending machine operator shall person provide the licenseDepartment with an updated list of all cigarette vending machines maintained by that person whenever there is a change or addition to the licensee.list.

A person who is licensed as a cigarette vending machine operator shall provide the Department with an updated list of all cigarette vending machines maintained by that person whenever there is a change or addition to the list.

The Department may issue a license without payment of fees to any applicant who is authorized to do business - 80th Session (2019) – 9 – on an Indian reservation or Indian colony or upon a military or other federal reservation.

- *SB81_R1* – 9 – Sec.

Sec.1.c.

26.

Each holder of a license shall:

1.

(a) Purchase unstamped cigarettes from any manufacturer whowho(b) holdsPurchase stamped cigarettes from a currentlicensed license;wholesale dealer of cigarettes;

(b) Purchase stamped cigarettes from a licensed wholesale dealer of cigarettes;

- 80th Session (2019) – 10 – (a) Purchase other tobacco products from any manufacturer of other tobacco products or wholesale dealer of other tobacco products;

(b) Sell other tobacco products from the premises for which the license was issued to any Indian tribe or colony listed by the - *SB81_R1* – 10 – Department pursuant to section 20 of this act, to any wholesale dealer of other tobacco products who holds a current license or to any tobacco retail dealer who holds a current license;

and (c) Temporarily store and fulfill orders for other tobacco products at a licensed warehouselogistics company.use or distribution center or through a4. licensed logistics company.

4.

The Department shall not charge any license fees to operate a warehouse or distribution center or for a license as a manufacturer, wholesale dealer of other tobacco products, tobacco retail dealer or logistics company.

- 80th Session (2019) – 11 – 5.

Except as otherwise provided in this section, each licensed wholesale dealer of cigarettes and licensed wholesale dealer of other tobacco products shall furnish a bond - *SB81_R1* – 11 – executed by the wholesale dealer as principal, and by a corporation qualified under the laws of this State as surety, payable to the State of Nevada and conditioned upon the payment of all excise taxes required to be precollected by the wholesale dealer under the provisions of this chapter.

Except as otherwise provided in this section, each licensed wholesale dealer of cigarettes who wishes to defer payment on the purchase of revenue stamps shall furnish a bond executed by the wholesale dealer of cigarettes as principal, and by a corporation qualified under the laws of this State as surety, payable to the State of Nevada and conditioned upon the payment of all deferred payments for revenue stamps.

Each bond must be in a principalprincipalred sum equal to the maximum amount of revenue stamps which the wholesale dealer of cigarettes may have unpaid at any time.

The Department may waive the requirement of the bond required by subsection 1 or 2, whenever a licensed wholesale dealer of cigarettes or wholesale dealer of other tobacco products - 80th Session (2019) – 12 – has maintained a satisfactory record of payment of excise taxes or deferred payments, respectively, for a period of 5 consecutive years.

-licensee *SB81_R1*shall –retain 12for –not Sec.less than 5 years all receipts, invoices, records, inventory records and financial statements necessary to substantiate information submitted by the licensee to the Department in any report or return required pursuant to this chapter.

30.

1.

Except as otherwise provided in subsection 2, a licensee shall retain for not less than 5 years all receipts, invoices, records, inventory records and financial statements necessary to substantiate information submitted by the licensee to the Department in any report or return required pursuant to this chapter.

If a licensee fails to submit a return or report which is required by this chapter, the licensee shall retain for not less than 8 years all receipts, invoices, records, inventory records and financial statements necessary to substantiate any information which the licensee was required to include in the report or return which the licensee failed to submit.

Upon request, a licensee shall provide verification of his or her gross income and any other matters affecting the enforcement of 5.e pThe Department may demand access to and inspect, examine, photocopy and audit all receipts, invoices, records, inventory records and financial statements of any affiliate of a licensee who the provisionsDepartment knows or reasonably believes is involved in the financing, operation or management of thisthe chapter.licensee.

5.

The Department may demand access to and inspect, examine, photocopy and audit all receipts, invoices, records, inventory records and financial statements of any affiliate of a licensee who the Department knows or reasonably believes is involved in the financing, operation or management of the licensee.

- 80th Session (2019) – 13 – Sec.

(a) Fails to file a report or certification required by this chapterrequired orby filesthis anchapter;plete incomplete or inaccurate report or certification (b) Fails to pay any tax owed upon cigarettes or other tobacco products required by this chapter;

- *SB81_R1* – 13 – (b) Fails to pay any tax owed upon cigarettes or other tobacco products required by this chapter;

(a) Impose on the licensee a civil penalty pursuant to NRSNRS(b) 370.425;In the case of a first violation of a provision of this chapter or any regulation adopted by the Commission, suspend the license of the licensee for not more than 60 consecutive calendar days;

(b)(c) In the case of a firstsecond or subsequent violation of athe same provision of this chapter or any regulation adopted by the Commission, suspend the license of the licensee for not more than 60 consecutive calendar days;days or permanently revoke the license of the licensee;

(c) In the case of a second or subsequent violation of the same provision of this chapter or any regulation adopted by the Commission, suspend the license of the licensee for not more than 180 consecutive calendar days or permanently revoke the license of the licensee;

A person whose license has been suspended or revoked shall not purchase or sell cigarettes or other tobacco products or - 80th Session (2019) – 14 – permit cigarettes or other tobacco products to be sold during the period of suspension or revocation:

The expiration, transfer, surrender, continuance, renewal or extension of a license issued pursuant to this chapter does not barbar5.r oraThe abateDepartment shall permanently revoke the license of any disciplinarylicensee proceedingswho knowingly or action.negligently:

5.(a) Sells or otherwise disposes of cigarettes or other tobacco products that are in the constructive possession of the Department;

The Department shall permanently revoke the license of any licensee who knowingly or negligently:

- *SB81_R1* – 14 – (a) Sells or otherwise disposes of cigarettes or other tobacco products that are in the constructive possession of the Department;

(c) The efforts of the licensee to provide an explanation of the reason for any inaccurate information included in a report or certification required by this chapter or the basis for the omission of information(d) fromIf sucha report or certification is inaccurate because of a variance between the inventory of cigarettes provided in the report or certification;certification and the actual inventory of cigarettes, the quantity of the variance, the materiality of the variance and the extent to which the licensee accounts for the variance by brand or by whether tax has been paid on the cigarettes;

(d) If a report or certification is inaccurate because of a variance between the inventory of cigarettes provided in the report or certification and the actual inventory of cigarettes, the quantity of the variance, the materiality of the variance and the extent to which the licensee accounts for the variance by brand or by whether tax has been paid on the cigarettes;

- 80th Session (2019) – 15 – (a) Inaccurate if the report or certification does not correctly record factual information or there is a discrepancy in the information included in the report and the factual information.

In adopting the regulations required by this section, the Department shall consider the effect of any suspension or revocation of a license on the inventory of cigarettes or other tobacco products that are in the stream of distribution at the time of suspension or revocation.

- *SB81_R1* – 15 – 1.

Each person licensed as a wholesale dealer of other tobacco products shall keep on hand at all times other tobacco products of a wholesale value of at least $5,000.$5,000.other tobacco Sec.

Sec.

- 80th Session (2019) – 16 – Sec.

(b) No credit may be allowed after the expiration of the period specified for filing claims for refund unless a claim for credit is filed with the Department within that period, or unless the credit relates to a period for which a waiver is given pursuant to NRSNRS2.60Every 360.355.claim for a credit or refund must be in writing and must state the specific grounds upon which the claim is founded.

2.

Every claim for a credit or refund must be in writing and must state the specific grounds upon which the claim is founded.

Within 30 days after disallowing any claim in whole or in part, the Department shall serve notice of its action on the - *SB81_R1* – 16 – claimant in the manner prescribed for service of notice of a deficiency determination.

No injunction, writ of mandate or other legal or equitable process may issue in any suit, action or proceeding in any court against this State or against any officer of the State to prevent or enjoin the collection under this chapter of any tax ororto any amount of tax required to be collected.

Within 90 days after a final decision upon a claim filed pursuant to this chapter is rendered by the Nevada Tax Commission, the claimant may bring an action against the Department on the grounds set forth in the claim in a court of competent jurisdiction in Carson City, the county of this State where the claimant resides or maintains his or her principal place of business or a county in which any relevant proceedings were - 80th Session (2019) – 17 – conducted by the Department, for the recovery of the whole or any part of the amount with respect to which the claim has been disallowed.

If the Department fails to mail notice of action on a claim within 6 months after the claim is filed, the claimant may consider the claim disallowed and file an appeal with a hearing officer within 45 days after the last day of the 6-month period.

- *SB81_R1* – 17 – 3.

A judgment may not be rendered in favor of the plaintiff in any action brought against the Department to recover any amount paid when the action is brought by or in the name of an assignee of the person paying the amount or by any person of other than the person who paid the amount.

The Attorney General shall prosecute the action, and the provisions of NRS, the Nevada Rules of Civil Procedure and the Nevada Rules of Appellate Procedure relating to service of - 80th Session (2019) – 18 – summons, pleadings, proofs, trials and appeals are applicable to the proceedings.

If an amount not exceeding $25 has been illegally determined, either by the person filing a return or by the Department, the Department, without certifying this fact to the State Board of Examiners, shall authorize the cancellation of the amount upon the records of the Department.

- *SB81_R1* – 18 – 1.

To possess or transport in contravention of the provisions of NRS 370.001 to 370.430, inclusive [;] , and sections 2 to 34, inclusive, of this act;

inclusive [;] , and sections 2 to 34, 9.

or (b) [Stores, sells or otherwise disposes of those cigarettes within the State.] Brings or causes to be brought into this State any - 80th Session (2019) – 19 – stamped cigarettes purchased from a licensed wholesale dealer for the purpose of resale to anyone other than a consumer.

[or to other persons in this State for the purpose of resale only.] Sec.370.073.

49.NREach manufacturer, wholesale dealer and retail:

NRSdealer 370.073shall: is hereby amended to read as follows:

370.073 Each manufacturer, wholesale dealer and retail dealer shall:

370.090 [1.] Each [applicant for a wholesale dealer’s license must, and each] person licensed as a wholesale dealer of cigarettes - *SB81_R1* – 19 – shall keep on hand at all times cigarettes of a wholesale value of at least $10,000.

(a) No] , no person, other than a wholesale dealer that receives unstamped cigarette packages directly from a person who holds aaives current permit to engage in business as a manufacturer or importer of cigarettes issued pursuant to 26 U.S.C.

or (b) A person engaged in the manufacturing, testing, investigation or research of cigarettes or other tobacco products, if - 80th Session (2019) – 20 – the person is operating legally and has all licenses and permits required by federal and state law.

Payment for the revenue stamps [or metered machine impressions] must be made at the time of purchase unless the wholesale dealer has been authorized to defer payments by the Department.

Upon receipt of the application and the bond or bonds required - *SB81_R1* – 20 – pursuant to [NRS 370.155,] section 29 of this act, the Department shall fix an amount for the wholesale dealer.

The amount owing for revenue stamps [and metered machine impressions] for which payment was deferred in any calendar month is due on or before the 25th day of the following calendar month.

Payment must be made by a remittance payable totoowing the Department.

- 80th Session (2019) – 21 – (b) The bond or bonds required pursuant to [NRS 370.155] section 29 of this act are cancelled or become void, impaired or unenforceable for any reason;

A wholesale dealer [whose stamping facilities are] located within the borders of this State shall affix stamps to all applicable cigarette packages [received at those stamping facilities] withinwithout 20affixing daysstamps, afteronly receipt.that part of the stock of the wholesale dealer that is identified for sale or distribution outside of the borders of this State.

A wholesale dealer may set aside, without affixing stamps, only that part of the stock of the wholesale dealer that is identified for sale or distribution outside of the borders of this State.

- *SB81_R1* – 21 – 4.

A person shall not affix stamps to any cigarette packages except upon the premises described in the license of a wholesale dealerdeaSec. or upon other premises where authorized by regulation.

Sec.

- 80th Session (2019) – 22 – (a) The physical inventory of cigarettes in packages with a Nevada stamp affixed to it in the possession or control of the wholesale dealer for sale or distribution within the borders of this State on hand at the start of business on the first day of the month;

(b) If the wholesale dealer has a physical location in this State, the physical inventory of cigarettes in packages with the stamp of another state affixed to it in the possession or control of the wholesale dealer for sale or distribution outside of the borders of this State on hand at the start of business on the first day of the mon(c) If the wholesale dealer has a physical location in this State, the physical inventory of cigarettes in unstamped packages in the possession or control of the wholesale dealer for sale or distribution outside or within the borders of this State on hand at the start of business on the first day of the month;

(c) If the wholesale dealer has a physical location in this State, the physical inventory of cigarettes in unstamped packages in the possession or control of the wholesale dealer for sale or distribution outside or within the borders of this State on hand at the start of business on the first day of the month;

(f) If the wholesale dealer has a physical location in this State, the quantity of cigarettes in unstamped packages in the possession - *SB81_R1* – 22 – or control of the wholesale dealer for sale or distribution within or outside of the borders of this State that were received by the wholesale dealer from a manufacturer during the month, and the name and address of each manufacturer from whom those products were received;

- 80th Session (2019) – 23 – (1) Another wholesale dealer of cigarettes located within or outside of the borders of this State;

(i) If the wholesale dealer has a physical location in this State, the quantity of cigarettes in packages with the stamp of another State affixed to it and in unstamped packages in the possession or outside the borders of this State during the month;ed or shipped (j) The quantity of cigarettes in packages with a Nevada stamp affixed to it in the possession or control of the wholesale dealer that were distributed or shipped outsidewithin the borders of this State to Indian tribes or instrumentalities of the Federal Government during the month;month, and the name and address of each person to whom those products were distributed or shipped;

(j) The quantity of cigarettes in packages with a Nevada stamp affixed to it in the possession or control of the wholesale dealer that were distributed or shipped within the borders of this State to Indian tribes or instrumentalities of the Federal Government during the month, and the name and address of each person to whom those products were distributed or shipped;

(m) The physical inventory of cigarettes in packages with a Nevada stamp affixed to it in the possession or control of the wholesale dealer for distribution within the borders of this State on hand at the close of business on the last day of the month;

- *SB81_R1* – 23 – (n) If the wholesale dealer has a physical location in this State, the physical inventory of cigarettes in unstamped packages in the possession or control of the wholesale dealer for sale or distribution within or outside of the borders of this State on hand at the close of business on the last day of the month;

- 80th Session (2019) – 24 – (q) The quantity and roll numbers for each type of Nevada stamp affixed during the month;

[The inventory of all cigarettes in the possession or control of the dealerdea(b) atThe thetotal closevalue of businessall oncigarette revenue stamps affixed by the lastdealer dayupon ofcigarette eachpackages month.sold in or shipped into the State by the dealer during the preceding month.] 2.

(b) The total value of all cigarette revenue stamps affixed by the dealer upon cigarette packages sold in or shipped into the State by the dealer during the preceding month.] 2.

(b) Shall, upon discovery of any error in the report filed with the Department, promptly notify the Department and file an amendedame[4.] report5.poIf, thatduring correctsthe preceding month, the error.wholesale dealer affixed cigarette [revenue] stamps upon cigarette packages imported into the United States, the wholesale dealer shall file with the report a copy of each certificate submitted pursuant to 19 U.S.C.

[4.] 5.

If, during the preceding month, the wholesale dealer affixed cigarette [revenue] stamps upon cigarette packages imported into the United States, the wholesale dealer shall file with the report - *SB81_R1* – 24 – a copy of each certificate submitted pursuant to 19 U.S.C.

All taxes and license fees imposed by the provisions of NRS 370.001 to 370.430, inclusive, and sections 2 to - 80th Session (2019) – 25 – 34, inclusive, of this act, less any refunds granted as provided by law, must be paid to the Department in the form of remittances payable to the Department.

The deposited money must be expended by (b) From the Departmentremittances inmade accordanceto withit itspursuant workto program.subsection 1 during the preceding month, less the amount transmitted pursuant to paragraph (a), transmit each month the portion of the tax which is equivalent to 85 mills per cigarette to the State Treasurer for deposit to the credit of the Account for the Tax on Cigarettes in the State General Fund.

(b) From the remittances made to it pursuant to subsection 1 during the preceding month, less the amount transmitted pursuant to paragraph (a), transmit each month the portion of the tax which is equivalent to 85 mills per cigarette to the State Treasurer for deposit to the credit of the Account for the Tax on Cigarettes in the State General Fund.

[Every] Each retail dealer [making a sale to a customer] shall, [at the time of sale,] not later than 5 calendar days after the retail dealer takes possession of a package of cigarettes, see that [each] the package [, packet or container] has the NevadaNevadas, cigarette [revenue] stamp [or metered stamping machine indicia] properly affixed.

Every cigarette vending machine operator placing cigarettes in his or her coin-operated cigarette vending machines for sale to the - *SB81_R1* – 25 – ultimate consumers shall at the time of placing them in the machine see that each package [, packet or container] has the Nevada cigarette [revenue] stamp [or metered stamping machine indicia] properly affixed.

- 80th Session (2019) – 26 – (a) In the actual possession of the person;

Any cigarettes found in the possession of any person except a person authorized by law or regulation to possess them, which do not bear [indicia of] such identifying marks as are necessary to ascertain the origin of the cigarettes and numbering in a legible manner on the Nevada excise tax [stamping,] stamp, must be seized by the Department or any of its agents, and caused to be stamped by a licensed [cigarette] wholesale dealer, or confiscated and sold by the Department or its agents to the highest bidder among the licensed wholesale dealers in this State after due notice to all licensed Nevada wholesale dealers has been given by mail to the addresses contained in the Department’s records.

(a) The United States Government for Army, Air Force, Navy or Marine Corps purposes and are shipped to a point within this State to a place which has been lawfully ceded to the United States Government for Army, Air Force, Navy or Marine Corps purposes;

- *SB81_R1* – 26 – (c) Any person if sold and delivered on an Indian reservation or colony where an excise tax has been imposed which is equal to or greater than the rate of the cigarette tax imposed under this chapter;

- 80th Session (2019) – 27 – 2.

(a) The number of packages of cigarettes destroyed for which refundref(b) isThe claimed;date or dates on which the [cigarettes were] wholesale dealer:

(b) The date or dates on which the [cigarettes were] wholesale dealer:

(b) Cigarettes which were stamped on their carton covers because of stamping machine failure to open the carton and stamp the(c) Cigarettes which were not stamped but were registered on the cigarettemachine packs;as being stamped because of failure of the meter counters.

or (c) Cigarettes which were not stamped but were registered on the machine as being stamped because of failure of the meter counters.

- *SB81_R1* – 27 – [4.] 5.

A wholesale dealer shall not export cigarettes unless they bear revenue stamps in accordance with NRS 370.170 - 80th Session (2019) – 28 – and 370.180 to any out-of-state destination other than by a licensed common or contract carrier.

[or metered machine impressions.] 3.delivering any unstamped cigarettes to a point outside of this state, make a duplicate invoice and transmit such duplicate invoice to the Department, at Carson City, not later than the 15th day of the following month.

Every wholesale dealer shall, at the time of shipping or delivering any unstamped cigarettes to a point outside of this state, make a duplicate invoice and transmit such duplicate invoice to the Department, at Carson City, not later than the 15th day of the following month.

370.3715 The [Executive Director] Commission may adopt regulations for the enforcement of NRS 370.371 to [370.379,] 370.378, inclusive.

enforcement of NRS 370.371 to [370.379,] Sec.

When cigarettes are advertised, offered for sale or sold in a bona fide clearance sale for the purpose of discontinuing trade in the cigarettes, and the advertisement, offer to sell or sale states the - *SB81_R1* – 28 – reason therefor and the quantity of cigarettes advertised, offered for sale or to be sold;

When cigarettes are advertised, offered for sale or sold as imperfect or damaged and the advertising, offer to sell or sale states - 80th Session (2019) – 29 – the reason therefor and the quantity of cigarettes advertised, offered for sale or to be sold;

370.376 A contract made by a person in violation of any of the provisionsand ofno NRSrecovery 370.371thereon tomay [370.379,]be made.9,] 370.378, inclusive, is void andSec. no recovery thereon may be made.

Sec.

If no injunctive relief is sought or required, any person injured by a violation of the provisions of NRS 370.371 to [370.379,] 370.378, inclusive, may maintain an action for damages andjurisdiction.cluding costs, including attorney’s fees, in any court of competent jurisdiction.Sec.

Sec.

- *SB81_R1* – 29 – (c) To have in his or her possession one or more cigarette stamps [or cigarette tax meter impressions] which he or she knows - 80th Session (2019) – 30 – have been removed from the pieces of packages or packages of cigarettes to which they were affixed;

Presence of the cigarettes in a cigarette vending machinemac2.ne isA primaperson faciewho evidenceviolates any of the purposeprovisions toof sell.subsection 1 is guilty of a category C felony and shall be punished as provided in NRS 193.130.

2.

A person who violates any of the provisions of subsection 1 is guilty of a category C felony and shall be punished as provided in NRS 193.130.

(e) To have in his or her possession any counterfeit stamp, with the intent to use the counterfeit stamp, knowing or having reasonable grounds to believe the stamp to be a counterfeit stamp;

- *SB81_R1*80th Session (2019) – 3031 – Sec.

§§ 1331 et seq., for the placement of labels, warnings or any other information required by that Act to be placed upon a container of cigarettes sold within the United States;

placed upon a container of cigarettes sold within the (b) Is labeled as “for export only,” “U.S.

or (h) Violates any other federal statute or regulation or with respectres2.ct toA which[wholesale anyor federalretail statutedealer] orperson regulationshall hasnot:een been violated.

2.

A [wholesale or retail dealer] person shall not:

Notwithstanding any other provision of law, the Department shall seize and destroy cigarettes upon which a revenue stamp [or - 80th Session (2019) – 32 – metered machine impression] was placed in violation of subsection 1 or 2.

- *SB81_R1* – 31 – 5.

370.390 Except as otherwise provided in NRS 370.380 and 370.382, any person violating any of the provisions of NRS [370.080] 370.090 to 370.315, inclusive, or sections 2 to 34, inclusive, of this act is guilty of a gross misdemeanor.misdemeanor.o 34, Sec.

Sec.

(1) Except for revenue stamps [or metered machine impressions] being properly affixed as required by this chapter, the cigarettes comply with all state and federal statutes and regulations;

- 80th Session (2019) – 33 – (1) Sell the other tobacco products to the highest bidder among the licensed wholesale dealers in this State after due notice to all licensed Nevada wholesale dealers has been given by mail to the addresses contained in the Department’s records;

or - *SB81_R1* – 32 – (2) If there is no bidder, or in the opinion of the Department the quantity of the other tobacco products is insufficient, or for any other reason such disposition would be impractical, destroy or dispose of the other tobacco products as the Department may see fit.

 The proceeds of all sales pursuant to this paragraph must be classed as revenues derived under the provisions of NRS 370.440 to 370.503, inclusive.

derived under the provisions of NRS 370.440 to 5.

3.370.090 to 370.327, inclusive;

Refusesorposed to pay any tax imposed pursuant to NRS [370.080] 370.0904. to 370.327, inclusive;

or 4.

- 80th Session (2019) – 34 – (I) Comply with any duty imposed upon him or her pursuant to the provisions of NRS 370.080 to 370.315, inclusive;

- *SB81_R1* – 33 – (b) Impose] impose on each person who violates any of the provisions of [NRS 370.321, 370.323 or 370.327] this chapter a civil penalty of:

[(1)] (a) Not more than $1,000 for the first violation [;] of a provision;

andanda) Not more than $1,000 for the first violation [;] of a [(2)] (b) Not [less than $1,000 nor] more than $5,000 for each subsequent violation [.] of the same provision.

(c) For a third and each subsequent such failure in a 24- month period, pay a penalty of 25 percent of the amount of tax due butsuspend unpaid.or revoke the license of the licensee who failed to pay the tax.

In addition to the penalty, the Department shall suspend or revoke the license of the licensee who failed to pay the tax.

- 80th Session (2019) – 35 – 5.

(a) [Brings or causes to be brought into] Maintains a place of business in this State , purchases other tobacco products [purchased] from the manufacturer or a wholesale dealer and [who - *SB81_R1* – 34 – stores,] possesses, receives, sells or otherwise disposes of such other tobaccoState;o products to wholesale dealers or retail dealers within this (b) Does not maintain a place of business in this State and sells or otherwise disposes of other tobacco products by any means, including, without limitation, through an Internet website, to wholesale dealers, retail dealers or ultimate consumers within this State;

(b) Does not maintain a place of business in this State and sells or otherwise disposes of other tobacco products by any means, including, without limitation, through an Internet website, to wholesale dealers, retail dealers or ultimate consumers within this State;

(a) Except as otherwise provided in paragraph (b), the [established] price for which other tobacco products are sold to a wholesale dealer [before] of other tobacco products, valued in money, whether paid in money or otherwise, without any discount or otheroth(1) reductionTrade [isdiscounts, made.]cash ondiscounts, accountspecial ofdiscounts anyorg: of the following:

(1) Trade discounts, cash discounts, special discounts or deals, cash rebates or any other reduction from the regular sales price;

or - 80th Session (2019) – 36 – (5) The amount of any tax, not including any excise tax, imposed by the United States upon or with respect to the other tobacco product;

370.450this 1.section, there is hereby imposed upon the [purchase oron 2,] possession] receipt, purchase or sale of other tobacco products [by a customer] in this State a tax of 30 percent of the wholesale price of those products.

Except as otherwise provided in [subsection 2,] this section, there is hereby imposed upon the [purchase or possession] receipt, purchase or sale of other tobacco products [by - *SB81_R1* – 35 – a customer] in this State a tax of 30 percent of the wholesale price of those products.

(1) At the time the other tobacco products are first possessed or received by a wholesale dealer of other tobacco products who maintains a place of business in this State for sale or disposition in this State;

- 80th Session (2019) – 37 – (b) Must be paid by the wholesale dealer of other tobacco products to the Department, in accordance with the provisions of NRS 370.465 .

Any wholesale dealer of other tobacco products who sells or distributes other tobacco products without paying the tax provided for by this section is guilty of a misdemeanor.

tax Sec.

A wholesale dealer of other tobacco products shall, not later than 20 days after the end of each month, submit to the Department a report on a form prescribed by the Department - *SB81_R1* – 36 – setting forth [each sale of] such information as the Department may prescribe concerning other tobacco products [that the wholesale dealer made] on which the tax provided by NRS 370.450 was imposed during the previous month.

(c) For a third or subsequent violation within 7 years, revocation of the license of the wholesale dealer.] Sec.

- 80th Session (2019) – 38 – 2.

2.] sold the other tobacco products;

- *SB81_R1* – 37 – Sec.

Every retail dealer shall keep at its place of business complete and accurate records for that place of business, including copies of all itemized invoices or purchases of other tobacco products purchased and delivered from wholesale dealers [.] of other tobacco products.

- 80th Session (2019) – 39 – 2.

Sec.370.525 1.RS 37Except as otherwise provided in subsection 2, a person may institute a civil action in a court of competent jurisdiction for appropriate injunctive relief if the person:

75.

NRS 370.525 is hereby amended to read as follows:

370.525 1.

Except as otherwise provided in subsection 2, a person may institute a civil action in a court of competent jurisdiction for appropriate injunctive relief if the person:

- *SB81_R1* – 38 – 2.

The Department shall notify each wholesale dealer and retail dealer when [a manufacturer or brand family is added] any changes are made to [or removed from] the directory pursuant to NRS 370.675 , including, without limitation, when a manufacturer, brand family or style of cigarettes is added to or removed from the directory, by sending a notice to the [mailing address or] electronic mail address of the wholesale dealer or retail dea2.r p[A wholesale dealer providedshall, tonot thelater Departmentthan 7 days after receiving a notice pursuant to NRSsubsection 370.073.1, provide:

2.

[A wholesale dealer shall, not later than 7 days after receiving a notice pursuant to subsection 1, provide:

The retail dealer shall, at the expiration of the 60-day period, - 80th Session (2019) – 40 – turn over possession of any unsold cigarettes to the Department for disposal in the manner provided in subsection 4 of NRS 370.270.

A wholesale dealer that receives a notice pursuant to subsection 1 that a manufacturer, brand family or style of cigarettes has been removed from the directory pursuant to NRS 370.675 shall, not later than 20 days after receiving the notice, identify and set aside any cigarettes of that manufacturer or of that brand family or style of cigarettes for sale or distribution outside of the borders of this State pursuant to NRS 370.210 and keep a record of the destination state for that product, or return any cigarettes of that manufacturer or of that brand family or style to the manufacturer or wholesale dealer.

- *SB81_R1* – 39 – (a) The escrow deposit due pursuant to NRS 370A.140 for each cigarette which is intended for sale in this State which the importer causes to be sent to a person who holds a license as a wholesale dealer [or license as a retail dealer] issued by the Department;

A nonparticipating manufacturer located outside the United States that conducts business in this State shall provide to the Attorney General on a form prescribed by the Attorney General a declaration from each importer that imports the cigarettes of the nonparticipating manufacturer which are intended for sale in this State stating that the importer accepts liability pursuant totothis subsection 1 and consents to the jurisdiction of the courts of this State for the purposes of enforcing this section.

Not later than [20 calendar days after] the [end] 25th day of each calendar [quarter,] month, and more frequently if so directed by the Department, each distributor shall submit such information as the Department requires to facilitate compliance with the provisions of this chapter and chapter 370A of NRS, including, without limitation, a list by brand family of the total number of cigarettes or, in the case of “roll-your-own” tobacco, the equivalent - 80th Session (2019) – 41 – unit count, for which the distributor affixed stamps during the previous calendar [quarter] month or otherwise paid the tax due for those cigarettes.

The Department may disclose to the Attorney General any information received pursuant to this chapter or chapter 370A of NRS and requested by the Attorney General for purposes of determining compliance with and enforcing the provisions of this chapter and chapter 370A of NRS.

The Department or the Attorney General may require at any time from a nonparticipating manufacturer proof, from the financial institution in which that manufacturer has established a qualified escrow fund for the purpose of compliance with chapter 370A of NRS, of the amount of money in that fund, exclusive of interest, the - *SB81_R1* – 40 – amount and date of each deposit to that fund, and the amount and date of each withdrawal from that fund.

In addition to the information otherwise required to be submitted pursuant to this chapter and chapter 370A of NRS, the Department or the Attorney General may, at any time, require a distributor or manufacturer of tobacco products to submit any additional information or documentation as is necessary to determine whether a manufacturer of tobacco products is or will continue to be in compliance with the provisions of this chapter and chapter 370A of NRS.

A wholesale dealer whose license is suspended or revoked in this State pursuant to this subsection is eligible for reinstatement - 80th Session (2019) – 42 – upon the earlier of the date on which the violation in the other state is cured or the date on which the license of the wholesale dealer is reinstated in the other state.

(a) The nonparticipating manufacturer is removed from the directory of another state based on an act or omission that would, if the act or omission had occurred in this State, be grounds for the removal of the nonparticipating manufacturer from the directory of this State pursuant to NRS 370.675, unless the nonparticipating of manufacturer demonstrates that its removal from the directory of the other state was effected without due process.

(c) The nonparticipating manufacturer fails to report the existence or result, including any conviction, of any investigation of the nonparticipating manufacturer which is known to the - *SB81_R1* – 41 – nonparticipating manufacturer regarding the commission of any crime relating to the manufacture, sale or distribution of tobacco products in this State or another state.

(d) The nonparticipating manufacturer fails to report any investigation of the nonparticipating manufacturer which is known to the nonparticipating manufacturer regarding any violation of the laws of any other state based on an act or omission that would, ifife the act or omission had occurred in this State, be grounds for the removal of the nonparticipating manufacturer from the directory of this State pursuant to NRS 370.675.

(f) The nonparticipating manufacturer has a shortfall or fails to make an escrow deposit that is due in another state or territory of the United States, has been given reasonable notice of the shortfall or failure and has failed to cure the shortfall or make the deposit within 30 days after receiving notice of the shortfall or failure.

- 80th Session (2019) – 43 – (g) In any calendar year the total nationwide sales of cigarettes on which federal excise tax is paid by the nonparticipating manufacturer exceeds by more than 5 percent the amount of such sales reported in:

or (3) Any intrastate report required by law,  unless the nonparticipating manufacturer cures the discrepancy or providesdays aafter satisfactoryreceiving explanationnotice of the discrepancydiscrepancy.repancy within 30 days3. after receiving notice of the discrepancy.

3.

- *SB81_R1* – 42 – (b) A letter of credit from a bank, savings bank, credit union or savings and loan association situated in Nevada, which meets the requirements set for that purpose by the State Treasurer;

or (c) A savings certificate, certificate of deposit or investment certificate of a bank, savings bank, credit union or savings and loan association situated in Nevada, which must indicate an account of an amount not less than the amount of the required cash payment or surety bond and, except as otherwise provided by specific statute, that the amount is not available for withdrawal except by direct order of the State Treasurer.

If a surety bond is provided as protection for the State of Nevada, the bond must be issued by an insurer who is authorized or - 80th Session (2019) – 44 – otherwise allowed under title 57 of NRS to issue such a bond pursuant to title 57 of NRS.

The Department of Taxation shall not accept bonds, savings certificates, certificatesofcertificates of deposit or investment certificates in lieu of the surety bond required to be deposited with the Department pursuant to section 29 of this act.

477.206 The Department of Taxation, in the regular course of conducting inspections of wholesale dealers, retail dealers and agents pursuant to NRS 370.001 to 370.530, inclusive, and sections 2 to 34, inclusive, of this act may inspect any packages of cigarettes to determine if they have been marked in accordance with NRS 477.198.

If a person operating in this State as a logistics company before the effective date of this section submits to the Department an application for a license as a logistics company pursuant to section 19 of this act within 180 days after the effective date of this section and is not issued a license as a logistics company pursuant to section 19 of this act within 180 days after the effective date of this section, the person may continue to operate as a logistics - *SB81_R1* – 43 – company until the person has been notified by the Department of a denial of his or her application.

notified by the Department of a 2.

If a person operating as a warehouse or distribution center in this State before the effective date of this section submits to the Department an application for a license as a warehouse or distribution center pursuant to section 19 of this act within 180 days after the effective date of this section and is not issued a license as a warehouse or distribution center pursuant - 80th Session (2019) – 45 – to section 19 of this act within 180 days after the effective date of this section, the person may continue to operate a warehouse or distribution center until the person has been notified by the Department of a denial of his or her application.

A wholesale dealer shall include other tobacco products described in this section in the report filed by the wholesale dealer with the Department of Taxation pursuant to NRS 370.465, as amended by section 73.7 of this act, for the January 2020 reporting period and remit the tax required to be paid by this section with that report.

Sec.370.110, 370.120, 370.130, 370.140, 370.150, 370.160, 370.235,.100, 370.250, 370.253, 370.379 and 370.445 are hereby repealed.

83.

1.

NRS 370.080, 370.085, 370.095, 370.100, 370.110, 370.120, 370.130, 370.140, 370.150, 370.160, 370.235, 370.250, 370.253, 370.379 and 370.445 are hereby repealed.

-(a) *SB81_R1*Upon –passage 44and –approval for the purpose of adopting regulations and performing other preparatory administrative tasks necessary to carry out the provisions of this act;

LEADLINES~~~~~ OF19 REPEALED- SECTIONS80th 370.080Session Required(2019) licensing of wholesale dealers, retail dealers, cigarette vending machine operators and man370.085 Maintenance and distribution of list of licenses and licensees and of Indian tribes from which Department does not collect tax.

370.095 Restrictions on issuance, maintenance and renewal of licenses.

370.100 Application for license.

370.110 Issuance of wholesale dealer’s license to certain applicants without payment of fees.

370.120 Contents of license.

370.130 Signing, posting and transfer of license.

370.140 Scope of license;

prohibited sales and purchases.

370.150 Licenses:

Period of validity;

renewal;

fees.

370.155 Wholesale dealers:

Bond or other security.

370.160 Counties, cities and towns may require business licenses.

and wholesale dealers.porting requirements for manufacturers 370.250 Suspension or revocation of license:

Grounds;

powers and duties of Department.

370.253 Procedure for suspension and revocation of license;

regulations.

370.379 Suspension or revocation of license;

reinstatement of license.

370.445 Dealer’s license required;

refusal to issue or renew;

suspension or revocation;

regulations;

penalty.

H - *SB81_R1*